from the any-day-now dept

In a dispute that's dragged on for over a decade, it appears that Antigua is, once again, making noises about how this time it's really, really, really going to do what the WTO has said it can do: set up a legal platform to infringe on American copyrights as a form of official payback for the US clearly violating a trade agreement with Antigua by outlawing online gambling. We've covered this dispute and all its twists and turns for years, but the short summary is that Antigua won at every turn, even as the US tried to once declare victory where it had lost. The US even tried to just say it could unilaterally change the trade agreement, which is not how those things work.

Of course, Antigua is a small country, so how does it "get back" at the US after such a win, when it's clear that the US doesn't care at all about the WTO saying it violated the agreement? Well, some folks had the bright idea that perhaps Antigua could just violate American copyrights, and pirate their way to the equivalent value of what the US should be paying. That idea was first floated around 2006, and it seemed like a joke. However, it continued to gain steam. Of course, the real idea behind these sorts of things is that Antigua and the WTO hope that this will make the RIAA and MPAA go running to the US government and beg them to come to some sort of settlement in which gobs of cash are sent from the US Treasury to Antigua. It's a well-known trick in trade wars: co-opt some powerful lobbyists who really shouldn't have any dog in the actual fight, and get them on your side. It happens in trade disputes quite often.

Of course, in the years since the WTO first gave its stamp of approval to this plan, what we've seen is every so often, Antigua makes a public statement along the lines of, "Hey! we're really going to do it!" and the US responds with "You'd better not!" and then there's silence for a year or two, and the dance starts all over again. Apparently it's time for that dance again, because Antigua is making very public that it's really, no really (do you hear that USTR?) really, really, really planning to move forward this time. No, really. They even had a meeting about it. And they're going to set up a body to "manage and operate" the platform. They also claim that they'll soon let private companies bid on participating. And... of course, they knock the US for "failing to negotiate."

I imagine that at some point the US will do another "Oh no, you'd better not!" statement, and then we'll be waiting around for another six to nine months before Antigua insists that it's really, really, no really moving forward with it this time. Really. Guys. Really. We mean it this time.

from the hoist-on-their-own-petard dept

We recently wrote about how, after a decade-long dispute, Antigua appeared to really be moving ahead with its plan to set up an online site that purposely offered infringing works, violating US copyright law -- and doing so with the authorization from the WTO as a response to the US breaking an existing trade agreement that helped collapse the online gambling industry that was based in Antigua. We've already noted that the US government (as it's been doing for years) has threatened retaliation if Antigua goes forward with the plan, even though the WTO has given it the stamp of approval (and ruled against the US multiple times in this dispute, almost all of which have been ignored by the US, with the US flat out lying at one point and pretending it won).

And, of course, it's not just the US government upset by this: the big copyright players have started sputtering out angry screeds. Take, for example, this absolutely laughable historical revisionism from the Copyright Alliance, which talks about just how "unfair" this whole thing would be, since it impacts third parties. This may be the most tone deaf statement from copyright maximalists in a long time (and that's saying something, given who we're talking about):

First, it raises a question of fundamental fairness about the appropriateness of punishing an unrelated group for circumstances beyond their control. U.S. copyright owners have found themselves chips in a high-stakes international game with no recourse. In addition, TRIPs obligations implicate many downstream stakeholders -- distributors and licensees, for example -- who rely on stable IP rights to function, so suspension of these obligations would affect many individuals and companies in other sectors and even other countries.

Wait, so suddenly the copyright players are concerned about "fairness" and the "appropriateness of punishing an unrelated group for circumstances beyond their control"? Really? So, um, I guess that means they're now against copyright term extension, which did exactly that. Or how about the very fact that IP agreements are included in international trade agreements -- which imposed significant and severe punishments on citizens of countries around the globe "for circumstances beyond their control."

Oh, and now "US copyright owners have found themselves chips in a high-stakes international game with no recourse." Welcome to the club. How about the whole of the public of the US and many, many other countries, who have found themselves exactly that: chips in a high-stakes international game with no recourse. The Big Copyright players, including those who funded and created the Copyright Alliance, have engaged in this game for decades, using the whole international trade game to force copyright maximalism through international trade agreements and then forcing draconian, anti-public laws on countries around the globe.

So, pardon me if I find it laughable that they of all people suddenly are whining when the shoe is (just slightly) on the other foot.

As for those "downstream stakeholders" who rely on "stable IP rights to function"... So, that must mean that the Copyright Alliance is against changes to copyright law, such as pulling works out of the public domain, which totally screwed over "downstream" merchants who were making use of those works. Oh, wait, they liked that ruling. Huh.

The fact is that the copyright industry has had the run of international trade agreements for a few decades. For an enlightening exploration of just how the big copyright players completely inserted themselves into international trade agreements, and used them as a key (some would argue the key) strategy for ratcheting up copyright laws around the globe, check out the book Information Feudalism by Peter Drahos and John Braithwaite. It tells the somewhat horrifying story about how a few powerful corporate interests effectively hijacked the TRIPS and WTO processes to use them to spread ratcheting up copyright and patent laws around the globe. We've seen that play out over the past few decades, and there's something absolutely ridiculous to see them now complaining when a single tiny WTO ruling goes against their interests.

Have they no shame?

And, of course, these same copyright maximalists have been instrumental in a number of international agreements since then that have only served to ramp up copyright rules and enforcement. Most recently, for example, we've talked about ACTA and TPP -- both of which would punish the public and harm downstream stakeholders, using them as an uninvolved pawn in a high-stakes international trade game with no recourse. Yet, somehow, the Copyright Alliance and their backers like that... because they're the ones pulling the strings.

Second, application in this situation seems to run counter to the purpose of cross-retaliation. Since the 1990s, Antigua has set itself up as a safe haven for offshore gambling. Licensing of gambling services make up a significant portion of the country’s revenues. Cross-retaliation as a remedy is, in theory, supposed to provide leverage to smaller, less-developed countries in trade disputes against larger nations. But the Antigua gambling industry is composed of large, international corporations.

Okay, now this one also makes me laugh. Notice these two paragraphs quoted one after the other. In the first one, the Copyright Alliance tries to argue that it's these poor "downstream stakeholders" who are impacted by Antigua's WTO-approved plans. In other words, "think of the poor little guy." In the second paragraph, it argues that this is unfair because it really benefits "large, international corporations."

Uh, guess whose copyrighted works are likely to be sold in this store? You guess it. Those large international corporations who funded and created the Copyright Alliance. It's so incredible dishonest to pretend that this dispute is about big companies in Antigua somehow harming the little guy in the US.

Really, the copyright maximalists apparently have absolutely no shame in historical revisionism and blatantly dishonest and misleading statements about the situation at hand.

from the more-sword-waving dept

This is hardly a surprise given the decade-long history we've gone through concerning the US's attempts to screw over Antigua by violating a trade agreement, and then ignoring, repeatedly, efforts by the WTO to make things right. Given that the WTO gave initial permission for Antigua to set up shop infringing on US intellectual property all the way back in 2007, it appears that Antigua has been nothing but patient. However, last week, it finally started making moves to put this "store" in place.

In response, the US has gone typically ballistic, threatening all sorts of consequences and blaming Antigua for the problems:

The United States warned Antigua and Barbuda on Monday not to retaliate against U.S. restrictions on Internet gambling by suspending American copyrights or patents, a move it said would authorize the "theft" of intellectual property like movies and music.

"The United States has urged Antigua to consider solutions that would benefit its broader economy. However, Antigua has repeatedly stymied these negotiations with certain unrealistic demands," said Nkenge Harmon, a spokeswoman for the U.S. Trade Representative's office.

Of course, what the US claims isn't supported by, well, anyone else. The WTO has now officially signed off (yet again) on the plan. Apparently the 2007 permission was merely "preliminary," but now it's official. The WTO says this is a perfectly legitimate way for Antigua to hit back at the US for its flagrant violation of international trade agreements in trying to shut down Antigua based online gambling sites.

As for Antigua's response to the US threats, the country's legal representative Mark Mendel told Wired (the link above) a bunch of things (go read the whole article), but I think this sums up the key points:

"I do think that the US has a mixed, immature and difficult domestic situation with respect to gambling in general and remote gambling in particular," Mendel told Wired.co.uk. "However, I think the main reason the US has not complied with the WTO rulings is that Antigua is such a small country they think they can get away with it. I also think that, unfortunately, some people in the US government were almost offended that Antigua chose to challenge the US and have been so persistent in its pursuit of justice that the US government has adopted unusually harsh and unyielding lines that have made it difficult to consider our issue in its proper context."

from the watch-this-space dept

Well here's a story that's more than a decade in the making. Way back in 2003, we first wrote about Antigua filing for sanctions against the US for its ban on online gambling. Antigua argued (with fairly strong support) that this violated a trade agreement between the US and Antigua, by blocking a form of free trade. The case was at the WTO for years, bouncing around. In 2004, the WTO ruled against the US, which the US promptly ignored. In 2005, the WTO again ruled in favor of Antigua on the issue, and the US (stunningly) responded by pretending that it had won, when it most clearly had not. Following that, the US pretended that it could just unilaterally change its free trade agreement to carve out gambling. Not surprisingly, Antigua (and the WTO) found that to be problematic.

It goes without saying that the US is big and powerful and Antigua... is not. So, as it became clear that the US intended to ignore any WTO ruling, people began to wonder if there was any remedy for Antigua over this issue. Normally, the WTO could do something with trade sanctions against the US and in favor of Antigua, but given how much Antigua relies on US trade, that would likely hurt Antigua a lot more than the US. Somewhere in the midst of this -- around 2006 -- someone somewhere floated the idea that one way that Antigua could be made whole would be to allow it to ignore US copyright laws, allowing it to "sell" copyrighted content on the cheap, without paying any royalties. That idea took on a life of its own and Antigua began pushing the idea itself around 2007. The world community started to side with Antigua over this, recognizing that the US was being completely unfair here... and the US did what the US does, and bought off a bunch of big countries to get them to shut up and stop supporting Antigua.

In late 2007, the WTO finally said that this plan of retaliatory copyright infringement could go forward in Antigua, but limited to just $21 million worth of infringement. Even so, the US immediately warned Antigua not to even think about it, or it would retaliate. There were some negotiations between the two countries that went nowhere and then... a lot of nothing. We've barely touched on the story since 2008 when Antigua once again threatened to (no, really this time!) launch a copyright infringing store with "permission" from the WTO. But, that didn't happen.

However, reports are now coming out that Antigua finally has plans in place to launch just such a store. Of course, we'll believe it when we see it, considering the decade-long posturing over this issue. Oh yeah, and, once again, the US is warning Antigua not to move forward, claiming that Antigua is acting in "bad faith" and launching the store might "serve to postpone the final resolution of this matter." Considering that the US lost at the WTO nearly a decade ago, and still hasn't "resolved" the matter, that's a fairly ridiculous claim. And, of course, the US is threatening to "retaliate" if Antigua goes forward:

"In these circumstances, Antigua has no justification for taking any retaliatory actions against the United States. Moreover, if Antigua actually proceeds with a plan for its government to authorize the theft of intellectual property, it would only serve to hurt Antigua’s own interests. Government-authorized piracy would undermine chances for a settlement that would provide real benefits to Antigua. It also would serve as a major impediment to foreign investment in the Antiguan economy, particularly in high-tech industries."

So, the short version from the US's point of view is that it's fine to ignore its own trade agreements that wrecked a significant part of Antigua's economy -- but as soon as Antigua fights back and wins, it's not allowed to make use of WTO-approved remedies after years and years of the US refusing to fix its abuses. And somehow when it finally (years and years later) moves forward with this other plan... the US argues that it would harm its international obligations? The hubris from the US is (once again) incredible, if not particularly surprising.

from the so-much-for-that-plan dept

Well, this wasn't difficult to predict at all. As noted last week, a company named Zookz clearly stretched and misinterpreted the WTO rulings in the dispute between Antigua and the US. Given the sheer number of emails their high-end PR people have been dumping my way, the fact that they were making a mockery of the ruling was part of the plan to get them press attention. Of course, they might not have expected the Antiguan gov't to quickly step up and point out that it didn't support Zookz either. So the latest is that Zookz has shut down the site and promised to return money to anyone who subscribed. They claim that they'll be back, but I wouldn't count on it. At least not in any form similar to what they originally advertised.

from the not-everyone-agrees dept

It's been quite some time since we last heard anything about the fascinating battle between the US and Antigua. It goes back a long time. We first wrote about this issue, nearly a decade ago, when the operators of online casinos in Antigua (where gambling is legal) were pretty pissed off to find out that the US claimed to have regulatory power over their online casino and could ban its use in the US. Antigua protested to the WTO, claiming that this was a violation of free trade agreements between the two countries. In 2004, the WTO agreed with Antigua, saying that because the US allows certain types of gambling, it's a violation of their agreement to ban Antiguan gambling sites. Of course, the US ignored the WTO and Antigua, recognizing that Antigua had little to no power over the US.

A year later, the WTO ruled again in favor of Antigua on this issue, though, amusingly, the US Trade Rep misleadingly claimed that the WTO had changed its mind. It had not. The US simply lied about what the WTO really said and declared victory, when it had actually lost again. The following year? The WTO again asked the US why it wasn't living up to its trade obligations on this point. In 2007, the WTO tried again and was ignored again.

In the midst of all this, a rather amusing and interesting suggestion popped up. In the random online discussions about how Antigua could actually flex its muscles against the US, someone pointed out that the WTO could allow Antigua to ignore US intellectual property, thereby allowing it to set up a cheap online download store. That idea gained traction at an incredibly fast pace, as lawyers jumped on the idea and set the wheels in motion. During that time, the US tried to unilaterally change its trade terms with Antigua to settle the matter, but that didn't get very far. Finally, at the end of 2007, the WTO agreed to letting Antigua ignore US intellectual property, but only to the tune of $21 million. Of course, the US quickly threatened Antigua not to go forward with any plans to violate US IP, but did little to rectify the situation. So last year, Antigua insisted it really (really, really, really!) was going to start ignoring US IP.

Since then? Well, it's been really quiet. Until now.

The LA Times has the story of a site called Zookz (from Carib Media), which claims to be taking advantage of the WTO ruling. It is, in fact, based in Antigua and is offering up unlimited music or movie downloads for $10/month -- or both music and movies for $18. Needless to say, the US government and the entertainment industry are vehemently opposed to Zookz interpretation of the WTO ruling -- especially when it comes to the fact that the Zookz service is apparently available outside of Antigua. Honestly, it seems like both sides are stretching the meaning of the ruling. The US and the entertainment industry basically want to completely ignore the WTO ruling, and interpret it to be entirely meaningless. That makes no sense, of course. The WTO wouldn't allow such sanctions unless there were a way to actually make use of them.

That said, it doesn't seem like the WTO ruling gave random private companies carte blanche to offer up music and movies. In fact, the Zookz interpretation gets even odder, where it interprets the $21 million to mean how much it can make, rather than the value "lost" to the industry. In fact, because of this Zookz claims that if it gets too close to selling $21 million (or if others enter the market, and combined they approach $21 million), they'll just have to start giving music and movies away for free to avoid going over the limit. While the WTO did want to give Antigua a weapon against the US, it's hard to believe that was what it meant. So, while this may be amusing to watch, the likelihood of Zookz lasting very long seems slim, at best.

from the stand-your-ground dept

The back and forth battle between the US and Antigua is long and involved. You can read the background if you want, but the short version is that the US suddenly claimed that Antigua-based online gambling sites were in violation of US anti-gambling laws. Antigua took offense at this, and noted that it appeared to violate free trade agreements between the two countries, most specifically because the US still allowed certainly types of domestic online gambling. The issue went to the WTO multiple times, and every time Antigua won -- and every time the US ignored the decision. At one point, the US pretended it won the ruling, and another time it announced that it was simply, unilaterally, changing its trade agreement with Antigua.

Since Antigua has little leverage against the US, it started to look at other options -- and took serious an idea that some folks first suggested in jest: if the US keeps ignoring the WTO rulings, let Antigua ignore US intellectual property rights. Antigua took this plan to the WTO, and the WTO approved it -- though, limited it to only $21 million worth of intellectual property, which given industry accounting probably represents half an album or so. Either way, the US threatened Antigua not to follow through on this plan, even though the WTO approved it -- and the two sides agreed to negotiate a settlement, with a deadline of today, June 6th.

Well, here we are, and Antigua is saying that (can you believe it?) the US appears to be taking a hardline position on this whole thing and no settlement is expected. It will be interesting to see if Antigua really follows through on ignoring US intellectual property, and how it goes about doing so. Also, it will be worth watching to see how they "count" just how much intellectual property they're ignoring. I'm assuming they won't use RIAA math.

from the no,-really,-really,-really dept

Officials in Antigua are now trying to draw a line in the sand, claiming that if the US doesn't finally agree to allow some forms of online gambling by the end of this month, it will go ahead with its threats to ignore US copyrights with the approval of the WTO. As you may recall, back in December, the WTO granted Antigua that right, after a loooooooong series of battles with the US over whether or not the US was violating free trade agreements by banning online gambling. Of course, every time the WTO sided with Antigua, the US would stall, claim the WTO sided with the US (when it clearly did not) and (my personal favorite) claim that even if it had broken trade agreements, it didn't matter any more because the US was unilaterally changing its trade agreements so that it was no longer violating them.

Of course, when Antigua won the final decision in December, allowing the country to ignore US intellectual property rights, the US government and the entertainment industry quickly warned Antigua not to follow through on those plans -- but the US government still won't shift in its position on the matter. Thus, Antigua is agitating to get this show on the road. While it first needs to get one last permission slip from the WTO, once that's in place, it can start ignoring the copyright on American movies and music. Of course, while some are suggesting that it may make sense for The Pirate Bay to move to Antigua, that's not accurate. After all, the WTO has said that Antigua can only violate $21 million worth of intellectual property, and with the way the entertainment industry counts damages, that's like half an album or so.

In fact, that seems to be exactly the angle that the entertainment industry is taking in this fight. An MPAA letter warning: "The proposed retaliation would be impossible to manage. The real and resulting economic harm would vastly exceed any amount the (WTO) might approve, even the grossly exaggerated amount ($3.4 billion) for which Antigua seeks approval, plus the economic harm would extend to other WTO members."

from the seriously? dept

Remember back in December, the EU, Canada and Japan suddenly agreed not to side with Antigua in the longstanding dispute over the US's online gambling ban violating free trade agreements? It was pretty clear that the US had cut some sort of deal with these countries (who had previously indicated they would side with Antigua). In order to understand what happened, a freelance writer named Ed Brayton filed a Freedom of Information Act request to get the actual agreement between the countries. And, as The Agitator points out, the US Trade Representative has denied the request, claiming that the agreement is classified, as it's a matter of national security. Yes. The US gov't is actually claiming that an agreement over online gambling between two countries is a matter of national security. Perhaps this really shouldn't be such a huge surprise. Remember, the law that was passed to ban online gambling was hidden as part of a law to protect our ports. Clearly, the EU, Canada and Japan had to side with the US against Antigua to protect our ports.

from the poetic-justice dept

My Cato colleague Sallie James describes the ongoing standoff between the US and the rest of the world at the World Trade Organization over gambling. When Congress banned online gambling, tiny Antigua filed a complaint alleging that the actions violated WTO rules. Antigua won, but the United States has so far bullied them out of taking advantage of their victory. The US has threatened to retaliate against Antigua if the latter begins targeting US copyrights as authorized in the trade ruling. James says that the United States is in the process of negotiating alternative compensation, including increased access to other American services markets. If that deal falls through, she warns, Hollywood might find itself "footing the bill" for the US government's ill-conceived gambling ban.

I certainly agree with her that the gambling ban was a bad idea, but I'm not sure it makes sense to paint Hollywood as an innocent victim here. After all, Hollywood has been pushing for decades to link trade policy and copyright law, going so far as to support free-trade agreements that include terms micro-managing other countries' copyright policies and requiring them to enact laws like the DMCA as a condition of access to American markets. Free traders rightly object when special interests try to use free trade agreements as a way to coerce countries into enacting their preferred labor and environmental policies. We should be equally incensed when Hollywood lobbies for the use of trade agreements to coerce countries into enacting their preferred copyright policies. So there's a certain amount of poetic justice in the fact that Hollywood has found its copyrights in the crosshairs of a trade dispute. James also correctly notes that retaliatory tarriffs are an insane way to impose damages on the losing country in a WTO dispute because tariffs hurt consumers in the "winning" country at the same time it hurts producers in the "losing" country. In contrast, if damages are imposed by targeting copyright law, consumers in the winning country will actually be made better off by lower prices for the copyrighted products in question. So while it would be best of Congress repealed its idiotic gambling ban, I'm not going too upset if Hollywood's attempts to link copyright law to trade policy come back to bite them.